Paper 2: Land Policy Development and Agricultural Transition

Jiun-hao Wang

Land policy has strong associations with agricultural development. Making market access

to farmland is a necessary condition for improving farm investment and agricultural

productivity. By contrary, agricultural policy guides farmer's production decisions and

sharps farming system; then, further lead to land-use structure changes. The typical

challenge faced by Asian countries is that supporting small-scale family farm may hinder

the efficiency and effectiveness of farmland use.

This paper aims to explore the effect of land policies on agricultural development, and

explain the paradigm shifts of agricultural policies and its consequences on management

of agricultural land resources. We start from land reform policies post-World War II,

illustrating a clear link between those related programs and the economic restructuring

in Taiwan. Secondly, this study introduces regulatory principles changed of land policy,

i.e. from farmland owned by farmers (FOF principle) since land reform program to

farmland for agricultural usage (F-for-A principle) in 1990’s, explaining its influences of

land market liberalization on agricultural land conversion and loss in Taiwan. Finally,

this paper demonstrates the policy paradigm transition from agricultural productivism

to multifunctional agriculture, suggesting that a future agricultural land policy should

contribute to enhancing agricultural competiveness, environmental friendly production,

improving rural quality of life and sustainable agricultural development in Taiwan.

Keyword: Land Reform, Agricultural Transition, Multifunctional Agriculture, Taiwan

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Land Policy Development and

Agricultural Transition

Jiun-Hao Wang Po-Kuan Lee Hsiu-Han Chang

National Taiwan University

Outline Overview of Agricultural Development

Socio-economic Consequences of Land Reform Programs

First-stage land reform policy (1949-1953)

Second-stage land reform policy (1982-1983)

Third-stage land reform policy (2009~present)

Paradigm Shift: From Productivism to Multifunctionality

Paradigm Shift in Agricultural Policy

Regulatory Principles Changed in Land Resource Management

Leisure Agriculture and Farmland Use Changed

Healthful Agriculture and Sustainable Farmland Use

Conclusion and Policy Implications

2

3

Basic Info about Agriculture

small-scale Family farm

Farmers and Household Income

Ca. 555,000 farmers,

5% of total employment

Average age is 62 y-old Average annual income per

household is ca. US$

34,000, only 22.5% from farming activity

Arable land for farming

796,618 ha

Small-scale farming faces challenges of structural problems, trade liberalization,

climate change.

Average farming

size per household

1.03 hectares

Food self-sufficiency ratio is 31% in 2016

Basic Features of Agricultural Development

[fundamental concept]

[why do we use it, what do we hope it will

accomplish?]

[how it is implemented, in general]

[challenges to implementation]

[where it is used in the world]

Indicators 1966 1970 1980 1990 2000 2010 2015

Cultivated land area

(ha) 869,223 905,263 900,062 884,443 851,495 813,126 796,618

Agricultural population

(1,000 persons; share of

total population)

586.34

(54.0%)

626.93

(42.5%)

542.19

(30.4%)

430.98

(21.1%)

368.89

(16.6%)

297.55

(12.9%)

271.06

(11.5%)

Average farm size (ha) 1.08 0.98 1.01 1.03 1.18 1.04 1.03

Agriculture contribution

to GDP (%) 28.21 15.27 7.51 4.00 1.98 1.60 1.70

Farmers of total

employment (%) 45.01 35.14 18.84 12.59 7.52 5.24 4.96

Average farm household

income (NT$) (income

% from farming)

32,320

(66.0%)

40,858

(45.2%)

244,424

(26.4%)

572,269

(21.4%)

917,623

(17.6%)

884,547

(20.6%)

1,025,699

(22.5%)

4

First-stage Land Reform Policy (1949-1953)

Objective: Redistribution of property right, social equity and stability

Measures: Rent reduction, sales of public land to tenants, Land-to-Tiller

Positive contributions

increasing agricultural productivity, farm household income

reducing rural inequality

boosting overall economic growth

Consequence: Self-employed farmers increased to 80%,

setting up a small-holder farming system

5

Programs affected

farmland (ha) % in private

farmland

% in total farmland

affected farm households

% in total farm households

Lands purchased after the rent reduction 35,522 5.2% 3.9% 66,328 9.4%

Public lands released to farmers 63,000 9.2% 7.0% 121,953 17.3%

Lands acquired under “Land-to-the-Tiller” 143,568 21.1% 15.9% 194,823 22.7%

Increase of self-cultivated lands 242,090 35.5% 26.8% - - Source: COA, 2012: 28; Chu, 2015.

37.5% Arable Rent Reduction Act in 1949

Land-to-the Tiller

program, 1953

6

Sales of Public Land to

Tenants, 1951

Second-stage land reform policy (1982-1983)

Objective: Enlargement of farm size, remove

disadvantages of small-scale farming left by the

first land reform

Measures:

implement agricultural land consolidation

encouraging co-operative farming

stimulating off-farm employment

long-term preferential loans for farmers to

purchase farmland

Results

increased farm size from 0.86 ha to 1.27 ha

farm mechanization reached 97%

7

Third-stage land reform policy (2009~present)

Objective: Improvement of agricultural structure ( age- and

size- structure), intergenerational transfer (encouraging old-

age farmers out and recruiting new young farmers in)

Measures: Small Landlord and Big Tenant program (SLBT)

Subsides for land rent both for old-age landlords and young tenants

land rent will be reduced or exempted from income tax

low-interest preferential loans for farm improvement (aged between18~55)

farmland must be leased for a minimum period of 3 years

Results

13,912 hectares of farmland leased in 2016

average age of big tenants is 42 years old and operate averagely 8.7 hectare

8

Young participant of the SLBT in Dounan FA

9

Official propaganda of the SLBT program

Year No. of small

landowners

No. of large-

scale Tenants Rented area (ha)

Average of rented area (ha/

tenant)

2010 8,121 703 2,580 8.04

2011 13,912 1,002 4,056 8.44

2012 18,265 1,328 6,549 7.21

2013 25,724 1,578 8,004 8.36

2014 29,049 1,670 11,268 9.02

2015 33,880 1,782 12,995 9.00

2016 38,282 2,058 13,912 8.72

Implementation results of Small landlords, Big Tenants program

10

Results of SLBT program, in 2013

Summary of Three-Stages Land Reform

Redistribution of property right Sharping a small-holder farming system

1949~1953

First-stage land reform

1982~1983

Second-stage land reform

Increasing farm size & farm mechanization Encouraging Co-operation & cooperative farming

2009~present

Third-stage land reform: Small Landlords, Big Tenants (SLBT)

Adjusting agricultural structure, both age-and farm size structure

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Paradigm Shift in Agricultural Policy

Productivism Multi-functionality

Three-Shēng

Agriculture

(1991)

• food production

• agricultural output

• farm productivity

• Non-market values

• Public-goods jointly produced

• Environmental sustainability

and biodiversity

• Rural culture & heritage

• Leisure agriculture

• Healthful agriculture

development

Stage 1 & Stage 2

Land Reform

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Production (farm),

Life (family & village),

Ecology (rural area)

development

Member of WTO

Regulatory Principles Changed in Land Policy

farmland owned by farmers principle (FOF-principle)

farmland used for agricultural use (F-for-AU principle)

farmland conversion

Farmland market

deregulation

2000 amendment of Agricultural Development Act Deregulation

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to non-agri sector

Within agri sector

14

Solarfarm Rural tourism

farmhouse

Farm accommodation & restaurant

agricultural use in question ?!

[what did Taiwan do that was different than other countries?]

[what was accomplished in Taiwan?]

[what challenges did Taiwan experience with implementation?]

[How did Taiwan respond?]

[why should the rest of the world care about the Taiwan experience?]

[what can they learn?]

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

760,000.00

770,000.00

780,000.00

790,000.00

800,000.00

810,000.00

820,000.00

830,000.00

840,000.00

850,000.00

860,000.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

farmhouse in Yilan Cultivated Land Area

Farmhouse in Yilan & Cultivated Land Area

(deregulation of farmland policy)

15

豪華農舍別墅

狗籠式農舍

Framhouse construction & farmland fragmentation

Leisure Agriculture Development and Farmland Use Changed

LA: Use of countryside combined with

agricultural landscape, farming

operations, rural culture, and village life

1,044 leisure farms in 2004,

XXXXXXXX

The average number of tourists per

month was 1991.46 persons

the average operating years was 7.62

years, with an average farm size of

44.34 hectares.

17

Spatial distribution of leisure farms

Leisure agriculture and farm tourism improves

rural economy and landscape significantly, as

well as create local business and specialties

18 farmlands ≠ production base＝leisure and recreational resource

Healthful Agriculture

Objective: environmental protection

& food safety.

Organic farming area is 6,490 ha,

by 2,598 farmers in 2015.

The organic agriculture promotion

Act enforced in 2018.

Organic farming

The labeling system ensures

the safety of processed

products. By 2012 the

CAS-marked products will reach

a value of NT$ 53 billion.

Good products with CAS label

TAP traceability system

GAP aims at toxic-free fruit

and vegetables. By 2015 reached

27,761 ha. with a production

value of NT$ 11.3 billion.

GAP

(Good Agricultural Practice) Objective: ensure compliance

with international safety

standards. By 2012, the

value of products certified under

TAP system reached NT$ 5.4

billion. 7

Healthful Agriculture and Sustainable Land Use & Food Safety

Taiwan Organic

Organic Farming (no chemical inputs)

conventional farming, under environmental friendly conditions

TGAP

School launch- Safe agricultural products

20

Healthful Agriculture development and Sustainable Farmland Use

0

500

1000

1500

2000

2500

0

5000

10000

15000

20000

25000

30000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Nu

mb

er

Are

a (

ha

)

Trends of GAP certificated, Organic farming certificated and Traceability certificated

Organic farming certificated area (ha) GAP certificated Area (ha)

No. of agricultural production and marketing groups No. of Traceability certificated farmers

Organic Farming Area

GAP certificated Area

Traceability certificated farmers

Production and marketing groups

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Conclusions and Policy Implications

Success of Taiwan’s Land

Reform happened under

extraordinary circumstances

Land reform is not a panacea

for socio-economic problems of

agri-development, negative

consequences are overlooked

Land reform is suggested

to dynamically rearrange rules,

institutions and rights that access

to and control over land

resources.

For Taiwan For the rest of world

An inspirational case and attractive

to those countries with small-scale

farming system

Three-stages land reform reflects the

paradigm shift in agricultural

development and farmland

management

Objectives and strategies of land

reform depend on societal needs and

expectations, social equality,

economic growth, or environmental

sustainability

22

THANK YOU

Jiun-Hao Wang Po-Kuan Lee Hsiu-Han Chang

Email: wangjh@ntu.edu.tw

Department of Bio-industry Communication and

Development, National Taiwan University

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